Author: Capt. Pierre Deseck, Msc, FNI
Hon. Prof. School of Navigation

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Persons and Businesses
Related to Shipping

THE Shipping Agent

Definition

The shipping agent is a permanent representative who, in a foreign port of call, looks after the owner's interests, in the latter's name and at his expense.

The shipping agent or for brevity's sake the agent, is thus in a way the trusted representative of the owner in a harbour. He is allowed to act in the owner's name with regard to the rights and duties of the owner towards third parties.

The responsibilities/competencies as well as the remuneration of the agent may be explicitly entered into a contract which has been concluded between himself and the owner. This practice is very common in the liner trade. In tramping, the agent usually has a tacit competency to act in the owner's name. Consequently, in the tramping there is almost never a written contract between the agent and the owner. In any case, the owner remains legally liable for the acts taken by the agent in the frame of the agency.

The duties of a shipping agent are very variable and depend mainly on the sort of service he has to render (liner traffic or tamp trade). Some duties will be the same for both services such as the duties with regard to the agency or dispatch of the vessel; other duties will be typical to the liner trade such ensuring there is enough cargo in the port of call (this is called acquisition).

Because of the great diversity of his duties, the shipping agent, within the framework of his responsibilities/competencies, often performs the tasks of other intermediaries such as chartering brokers (or cargo brokers), booking agents, etc.

From the foregoing it can be readily seen that there are several categories of shipping agents such as: "port agents", "liner agents" and "own agencies".

The Port Agent

The port agent is the representative of the owner in a certain harbour in the tramp trade. As mentioned before, there is usually no written agreement between the owner and the port agent, so that in fact, the latter has a tacit responsibility/competence. His tasks may be multiple and may include:

  • look for a berth for the incoming ship;
  • arrange for the pilot and the tugs if necessary;
  • make-up the documents for the customs and harbour services;
  • assist the master in making the necessary contacts with the local authorities and the harbour authorities;
  • arrange for the necessary ship provisions;
  • arrange for the bunkers if needed;
  • arrange for the necessary repairs;
  • convey instructions to and from the owner;
  • organize the supply, transport and the handling of the goods;
  • organize the necessary contacts with the stevedores;
  • collect the freights;
  • contact the shippers and receivers of the goods;
  • in case of damage, make the necessary contacts (only at the master or owner's request) with the insurance company, the P & I club, the classification society, the nautical inspection, the experts or surveyors, etc.

For his services/intervention, the port agent receives a fee called "agency fee".

It is in the owner's interest to appoint a trustful and energetic agent. It is customary in the tramp trade that the expenses for loading and discharging are for charterer's account. The latter shall therefore usually demand the right to appoint himself the agent in the port of loading and discharging to look after his interests. This has to be clearly stipulated in the charter party in the "Agency Clause" which has to mention: "Owners' agents" or "Charterers' agents". Notwithstanding the fact that the charterers appoints the agent, it is nonetheless customary that the owners pays the agency fee.

If the owner is obliged to take the charterer's agent (which is realized during the conclusion of the charter party) the owner can nonetheless protect his interests, up to a certain point, by appointing a "husbandery agent", who will then assist the master and protect the interests of the owner, so that the actions of the charterer's agent will not harm the owner's interests.

Notwithstanding the fact that the agent, for his appointment, will have the tendency to show allegiance to the charterer, he must not forget that he is in fact remunerated by the owner. It is his duty to protect the interest of the owner, independent of who appointed him. This means that if the agent has been appointed by the charterer, he still needs to provide a full service to the ship and the master, as if he were appointed by the owner.

The Liner Agent

In harbours in which the company does not have his own organization, the owner of a liner trade will appoint a liner agent.

The relationship between the liner agent and the owner (the principal) is laid down in an agreement called "agency contract" or "agency agreement".

In 1969 a uniform agreement was drafted by FONASBA (Federation of National Associations of Ship-brokers and Agents), the use of which is highly recommended by the 23 affiliated members. This type of agreement, "Standard Liner Agency Agreement" refers also to the local uses in case of intervention by the agents as included in the general conditions of the professional association of the country concerned.

DUTIES OF THE LINER AGENT

The duties of the liner agent can be classified into two categories: the duties of the cargo broker and the duties of the dispatcher.

Duties of the liner agent as cargo broker

One of the main duties of the liner agent is to act as a canvasser.

According to the size of the ships and the frequency of their calls, the liner agent receives a certain allotment for purposes of acquiring cargo. In order to be as rational as possible, the liner agent will work as follows:

  • he will establish a sailing list which he will circulate widely and he will also announce the departures in specialized journals (e.g. the Lloyds).
  • He will promptly establish contacts with forwarders, factory agents, importers and exporters. he will mainly seek these contacts through his canvassers.

These canvassers will try to impress the shippers with the excellent service and/or freight the liner agent has to offer. This can sometimes be a very delicate task to fulfil, as quite often, the canvasser of the forwarder also visit these potential shippers.

The liner agent's canvasser must, therefore, inform the shipper if he doesn't have a fixed forwarder, through whom, for commercial reasons, the bookings will have to be made.

To inform the agency of the results of their contacts and the possible shipping prospects, the canvassers make solicitation reports or canvassing reports.

These canvassing reports are used to forward information to their own agent, as well as to a representative agent or to the owners.

As a cargo broker, the liner agent will also book outward cargo and inform the shippers on which quay and when the goods are to be presented and when the loading will start. According to the incoming bookings, booking lists are drawn up. Meanwhile, in the manifest department the shipping documents are collected (shipping permits, bills of lading) which are necessary to commence the loading operations. The collected documents are also compared with the booking lists.

The liner agent also has an important role with regard to the inward cargo. The receiver or his forwarding agent shall, as holder of the bills of lading, present himself to the shipping agent and receive the necessary information regarding the quay and the time where the goods will be discharged. Upon arrival of the goods and after payment of the reception costs and eventually of the freight, the receiver presents the delivery order whereupon he collects the goods from the reception corporation.

Duties of the liner agent as dispatcher of the vessel

Besides looking after the in- and outward cargo, the agent is also responsible for the dispatch of the vessel. As a dispatcher he needs to aim at the quick dispatch of the vessel at the lowest cost. He should, of course, not forget to also look after the interest of the master and the crew of the ship.

Summary of the duties of the liner agent

As cargo broker

  • Provide the necessary information concerning the freight rates and the publication of the sailing lists.
  • Look for cargo via notices and sailing lists.
  • Booking of cargo and the conclusion of the agreements.
  • To draw up, to initiate and deliver the required documents (booking lists, shipping permits, delivery orders).
  • Contact the shippers/forwarders with regard to the deliveries for shipment.
  • Fulfil the necessary formalities regarding the delivery and reception of the goods.
  • Settle cargo claims.
  • To organize receptions or other entertainment.

As dispatcher

  • Arrange for a suitable berth.
  • Contact the stevedores and the corporations.
  • Assist the master and his crew.
  • To arrange for the pilot and/or tugs.
  • Arrange for the clearing of the ship and the goods and to fulfil the other custom and administrative formalities.
  • Deposit the note of protest.
  • Arrange for loading, discharging, provisioning and bunkering of the ship.
  • The signing on and signing off of crew members.
  • To mediate in case of general average.

By outward cargo

  • Mail the sailing lists; visit exhibitions or fairs; announcement in specialized papers.
  • Contact shippers by telephone, in writing, by fax or e-mail.
  • Visit customers, inland as well as abroad.
  • Quote freight charges to the clientele.
  • Enter cargo on booking lists.
  • Forward details of booked cargo to the owners.
  • Hand over the shipping permits and bills of lading from shippers; to initial shipping permit; to check bills of lading.
  • Deliver the shipping permits to the chief marker.
  • Calculate the freight in accordance with the measurement slips.
  • Hand over a copy of the booking lists to the stevedore.
  • Arrange the formalities in connection with dangerous goods.
  • Request a berth from the harbour master.
  • Draw up the manifests per destination harbour.
  • Arrange for clearance of the ship on arrival by the water clerk
  • Signing and dating of bills of lading.
  • Collect freights if payable before departure and before delivery of the bills of lading.
  • Clearing of the ship at departure.
  • Inform the next port of call and the owners of the ship's departure.
  • Prepare the settlement of account.
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  • Prepare the special documents required in the different ports of discharge.
  • Draw up  "manifest correctors" in case of wrong freight calculations.
  • Deal with claims.

By inward cargo

  • Reception of cargo plan and manifests per harbour and cargo.
  • Check the freight calculations.
  • Send loading plan to stevedores; drawing up of discharging plan.
  • Mail the notices of arrival to receivers.
  • Contact receivers/forwarders to agree on means of reception of the goods.
  • Draw up freight lists for customs.
  • Prepare the delivery orders, freight and/or reception invoices
  • Deliver goods on the exchange for the delivery order.
  • Appointment of a surveyor in case of damage to the goods.
  • Prepare a report to the owners in connection with damages.
  • Draw up settlement of accounts.
  • Appointment of experts in case of dispute regarding damages to the cargo.

The Relationship Agent – Owner

The agreement between the agent and the owner can be established either in writing (e.g. Standard Liner Agency Agreement), verbal or tacit.

In case of a tacit agreement, the agent has authority to take any action which is not covered in a written contract or in clearly defined instructions (e.g. instructions transferred by fax) but which may be necessary in the context of his assignment as an agent. An example of a tacit competence is the signing, in the name of the owner, of some guarantees required by the harbour authorities, before they grant permission for the ship to berth in the harbour. If the agent does not comply with the demands of the harbour authorities, or if he had to wait for clear instructions from the owner to comply with this request, he would harm the interests of the owner and be unable to fulfil his original task (namely his duty as an agent).

Any action taken by the agent shall bind the owners if they have entered into a tacit agreement.

Whether the agent has been appointed by the owners themselves or in accordance with the terms of the charter party, makes no difference. The agent must, at all times, protect the interests of the owners (and of the charterers) to the best of his ability and always carefully follow the owners' instructions.

The agent may never exceed his authority/competence. If he exceeds his authority anyway and refuses to accept or follow the instructions from the owners, he will be personal responsible for his act and bear all the consequences thereto.

The agent always has to be sure that third parties with whom he deals, in the name of the owners, are well aware of his capacity as an agent and that all costs made in the frame of the agency, for the account of the owners, are regarded as such. In other words, the agent may never give to a third party with whom he deals, the impression that he is the owner. Therefore, it is of the utmost importance that all documents are signed by the agent as agents only or as agents for owners.

In most countries, this practice is protected by law.

Accordingly, a person who signs a document in his own name and without reservations, is supposed to have acted personally and to be thus personally responsible. If, as a consequence, the agent wants to avoid every misunderstanding and make it very clear that he is not acting in his personnel name ( and as such not personally bound) but only acts in name of his principal (the owner) each document presented to a third party must display as agents only. Thanks to the words "as agents only" which is universally and legally accepted, the agent cannot be obliged to pay, for example, an invoice for the account of the owners and which has been accepted as such.

Remark

The mention of only the word "agent" when signing a document is not a sufficient guarantee that the agent is not personally bound.

The agent may never delegate his assignment or a part thereof to a third person, unless he has received the explicit or tacit authorization from the owners to do this. All documents and information entrusted to him by the owners must be considered as confidential.

The Agent and the Time Charterer.

The position of the agent in a voyage charter is in fact the same as the one from the port agent. The "Agency Clause" stipulates who appoints the agent, Owners' agent or Charters' agent. Usually the charterer appoints the agent and the owner pays the agency fee.

In a time charter, the situation is different to a voyage charter. In a time charter, the time charterer becomes a so-called disponent owner. He becomes a sort of acting owner, who now is the operator of the ship and who, in this capacity appoints the agent. The time charterer decides when the ship will load or discharge, what the ship will load and under which terms. During the time charter period he pays all the variable expenses or costs of the ship such as fuel costs, port and light dues, tugs and pilot dues, canal dues, agency fees, and the costs for cargo handling. The fixed costs or running costs of the ship such as the crew's wages, the ship's stores, the insurance of the ship, the costs for administration and others costs remain with the owners.  The master now has to follow the instructions of the charterer and offer him his services the best he can. It is consequently normal not to say compulsory that the time charterer now appoints and pays the agent. The agent will now have to act in the charterer's interest and satisfy all his requirements including those of the master.

The remuneration

For his intervention, the agent is remunerated by the owners or the ship's operator (in case of a time charter)

In tramping, the agent will be remunerated for his intervention as dispatcher. This remuneration which is called "agency fee" is usually determined in accordance with the "Official Agency Fees" or the agent can propose a certain amount based on commonly used tariffs.

In the liner shipping, the agent receives besides his "agency fee" also a commission (agent's commission) for his intervention as a cargo broker which is determined as a percentage on the net freight (freight less rebates). This percentage is different for inward and outward cargo and is, of course higher for outward cargo.

The expenses made or advanced by the agent in connection with the ship and her cargo are called "ship's disbursements" and are entered in the "disbursement account".

The Liner Agent as the Owner's Confident

As mentioned before, the liner agent has two important tasks: one as a cargo broker and one as dispatcher. Besides these two direct tasks, a good agent will, as a trusty to the owners, also have an information task and a control task.

The information task of the agent

The agent must inform the owners continuously about the facts directly connected to the cargo of the ship. These include:

  • the state of the bookings;
  • the prospects with regards to weights and volumes;<:
  • the assumed time necessary to load and/or discharge the goods;
  • the expected time of departure (E.T.D.).

Besides the above technical particulars about the ship and her cargo, the agent needs to inform the owners constantly about the following points:

  • the financial, commercial, social and even the political situation, not only in the harbour concerned but also in the adjacent hinterland;
  • technical projects regarding the harbour;
  • large national or regional expansion programs or investments;
  • the possibility of strikes in or outside the harbour;
  • the flow of goods which takes place outside the company (by land,  by sea or by air) to destinations also called at by the company;
  • the names of large exporters so that the necessary efforts can be made to acquire a part of their transport.

The control task of the agent

The control task of the agent extends on the one hand to the services rendered to the ship in the harbour and on the other hand to the handling of the goods.

With regards to the services (harbour dues, provisioning, tugs and pilotage, repairs, etc.) the agent has to carefully look at the prices and tariffs as well as at the quality.

With regard to the handling of the goods, he mainly needs to check the outward cargoes and particularly the measurements, the volumes and whether the nature of the goods were correctly given and if the correct freight was applied. He must also assure himself that certain goods are not of a dangerous nature (e.g. IMO-goods and the like).

The Own Agent

Large shipping companies often have, in countries where they have a lot of commercial interests, their own office, usually called "agency".

The head of such an agency is usually a delegate from the company who is well acquainted with the uses and customs of the company. He will consequently follow the same policy in the agency as in the company. Between the agency and the company there are seldom any conflicts, except for local ones. The agency often has to adapt itself to the local practices.

Further, the own agent nearly has the same tasks as those from the liner agent:

  • the tasks of a cargo broker ;<:
  • the task of a dispatcher ;
  • an information task and
  • a control task.

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